Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/87771
Authors: 
Kangasniemi, Mari
Kauhanen, Antti
Year of Publication: 
2011
Series/Report no.: 
ETLA Discussion Papers, The Research Institute of the Finnish Economy (ETLA) 1249
Abstract: 
We study the impact of performance-related pay (PRP) on gender wage differences using Finnish linked employer-employee panel data. Controlling for unobserved person and firm effects, we find that bonuses increase women's earnings slightly less than men's, but the economic significance of the difference is negligible. Piece rates and reward rates, however, tend to increase gender wage differentials. Thus, the nature of a performance related pay plan is important for gauging the impact of PRP on gender wage differentials. A comparison with OLS results shows the importance of controlling for unobserved person and firm effects.
Subjects: 
gender wage differences
performance-related pay
person and firm effects
panel data
JEL: 
J16
J33
M52
Document Type: 
Working Paper

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